Market Talk – February 24, 2021

Posted Feb 24, 2021 by Martin Armstrong |

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ASIA:

New home prices in China grew at a faster pace in January, driven by red-hot demand in the country’s mega cities despite the government’s cooling measures. Average new home prices in 70 major cities increased 0.3% in January from a month earlier, versus a 0.1% gain in December, according to Reuters calculations based on data released by the National Bureau of Statistics. On a year-on-year basis, new home prices rose 3.9%, quickening from a 3.8% rise in December.

India’s central bank governor said The Reserve Bank of India (RBI) is concerned that cryptocurrencies may impact financial stability in Asia’s third-largest economy. These major concerns have been conveyed to the government. Prime Minister Narendra Modi’s administration is proposing to prohibit all private cryptocurrencies in the country and create a framework for an official digital currency.

The major Asian stock markets had a mixed day today:

NIKKEI 225 decreased 484.33 points or -1.61% to 29,671.70
Shanghai decreased 72.28 points or -1.99% to 3,564.08
Hang Seng decreased 914.40 points or -2.99% to 29,718.24
ASX 200 decreased 61.40 points or -0.90% to 6,777.80
Kospi decreased 75.11 points or -2.45% to 2,994.98
SENSEX increased 1,030.28 points or 2.07% to 50,781.69
Nifty50 increased 274.20 points or 1.86% to 14,982.00

The major Asian currency markets had a mixed day today:

AUDUSD increased 0.00295 or 0.37% to 0.79410
NZDUSD increased 0.00626 or 0.85% to 0.74040
USDJPY increased 0.68 or 0.65% to 105.95
USDCNY decreased 0.00798 or -0.12% to 6.45068

Precious Metals:

Gold decreased 7.69 USD/t oz. or -0.43% to 1,797.37
Silver increased 0.20 USD/t. oz or 0.72% to 27.820

Some economic news from last night:

South Korea:

Manufacturing BSI Index (Mar) decreased from 84 to 83

Australia:

Construction Work Done (QoQ) (Q4) increased from -2.6% to -0.9%

Wage Price Index (QoQ) (Q4) increased from 0.1% to 0.6%

Wage Price Index (YoY) (Q4) remain the same at 1.4%

New Zealand:

RBNZ Interest Rate Decision remain the same at 0.25%

Some economic news from today:

Japan:

BoJ Core CPI (YoY) remain the same at -0.3%

Hong Kong:

GDP (YoY) (Q3) increased from -3.5% to -3.0%

GDP (QoQ) (Q3) decreased from 2.8% to 0.2%

EUROPE/EMEA:

Easyjet shares soared almost 10% on Tuesday after the low-cost carrier reported a surge in summer ticket sales, hours after U.K. Prime Minister Boris Johnson set out England’s proposed route out of its third COVID-19 lockdown. Johnson said the government’s global travel task force will issue a report on Apr. 12 recommending how international travel can safely restart, which he said will “give people time to make their plans for the summer.” The lockdown ban on most international travel will stay until at least May 17.

ExxonMobil said Wednesday it has agreed to sell most of its non-operated upstream assets in the U.K. central and northern North Sea to HitecVision for more than $1 billion. The sale has an additional upside of about $300 million in contingent payments, based on the potential for higher commodity prices. The company’s development plans prioritize Guyana, the U.S. Permian Basin, Brazil and LNG, said Neil Chapman, senior vice president of ExxonMobil.

The major Europe stock markets had a green day:

CAC 40 increased 18.14 points or 0.31% to 5,797.98
FTSE 100 increased 33.03 points or 0.50% to 6,658.97
DAX 30 increased 111.19 points or 0.80% to 13,976.00

The major Europe currency markets had a mixed day today:

EURUSD decreased 0.00084 or -0.07% to 1.21450
GBPUSD decreased 0.00045 or -0.03% to 1.41142
USDCHF increased 0.00261 or 0.29% to 0.90751

Some economic news from Europe today:

Germany:

German GDP (YoY) (Q4) increased from -3.9% to -2.7%

German GDP (QoQ) (Q4) decreased from 8.5% to 0.3%

France:

French Business Survey (Feb) increased from 96 to 97

Swiss:

ZEW Expectations (Feb) increased from 43.2 to 55.5

US/AMERICAS:

The Food and Drug Administration endorsed Johnson & Johnson’s new coronavirus vaccine, marking the third available vaccination in the US. The new vaccination only requires one dosage, unlike Pfizer and Moderna, however it is less effective with a 66% overall effectiveness rating. For people with pre-existing conditions over 60, the vaccine is only 42.3% effective. The FDA plans to deliberate later in the week to decide is an emergency approval is warranted.

Federal Reserve Board Governor Lael Brainard echoed words stated yesterday by Fed Chairman Jerome Powell in that the US is far from meeting employment and inflation targets. “Today the economy remains far from our goals in terms of both employment and inflation, and it will take some time to achieve substantial further progress,” Brainard said. Under a policy adopted in August 2020, the central bank will not raise interest rates during times of low inflation, as providing the labor market time to recover if their first priority.

Brazil’s federal public debt reached a new high, according to data released by the Treasury this Wednesday. Federal public debt advanced 1% from December to January, before reaching 5.06 trillion reais ($931.7 billion). The total domestic debt stock has reached 4.82 trillion reais after rising 1.2% MoM.

US Market Closings:

Dow advanced 424.58 points or 1.35% to 31,961.93
S&P 500 advanced 43.99 points or 1.13% to 3,925.36
Nasdaq advanced 132.77 points or 0.99% to 13,597.97
Russell 2000 advanced 53.07 points or 2.38% to 2,284.38

Canada Market Closing:

TSX Composite advanced 154.44 points or 0.84% to 18,484.53
TSX 60 advanced 8.28 points or 0.76% to 1,098.86

Brazil Market Closing:

Bovespa advanced 440.32 points or 0.38% to 115,667.78

ENERGY:

The oil markets had a mixed day today:

Crude Oil increased 1.59 USD/BBL or 2.58% to 63.2600
Brent increased 1.76 USD/BBL or 2.69% to 67.1300
Natural gas decreased 0.057 USD/MMBtu or -1.98% to 2.8220
Gasoline increased 0.0364 USD/GAL or 1.96% to 1.8950
Heating oil increased 0.0375 USD/GAL or 2.01% to 1.9055

Top commodity gainers: Brent (2.69%), Crude Oil (2.58%), Lean Hogs (3.47%) and Palladium (3.62%)
Top commodity losers: Natural Gas (-1.98%), Sugar (-0.98%), Zinc (-0.81%), and Canola (-3.61%)

The above data was collected around 14:05 EST on Wednesday.

BONDS:

Japan 0.12%(+1bp), US 2’s 0.13%(+0.016%), US 10’s 1.39%(+3bps); US 30’s 2.23%(+0.034%), Bunds -0.32% (+4bp), France -0.07% (-1bp), Italy 0.69% (+5bp), Turkey 12.74% (+8bp), Greece 1.01% (+8bp), Portugal 0.28% (+3bp); Spain 0.41% (+11bp) and UK Gilts 0.73% (+1bp).